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Ukraine Reducing Russian Gas Imports

Ukraine's Minister of Energy Yuriy Boyko has appeared on television to speak about plans to reduce the country's dependence on Russian supplies of natural gas, including the possibility of Russia taking his country to international court.

On the Inter television channel on the evening of November 16, Boyko said Kyiv is dissatisfied with the price Russia's gas giant Gazprom charges Ukraine for gas.

"We know there will be arguments, even court battles with our Russian colleagues," he said, but Ukraine intends to defend its national interests.

Ukraine signed agreements on gas prices with Russia in 2009 during a dispute between the two countries about the transit of gas. That dispute resulted in a suspension of Russian gas supplies through Ukraine and left areas in eastern and central Europe facing severe shortages of gas during one of the coldest periods of the year.

EU leaders pushed the two countries to quickly resolve their bilateral problem and allow gas exports to reach European destinations.

Ukrainian authorities later jailed former Prime Minister Yulia Tymoshenko for abuse of office over signing a deal with then Russian Prime Minister Vladimir Putin that allowed gas shipments to Europe to resume.

Ukraine has been attempting to convince Russia to renegotiate the Tymoshenko-Putin gas agreement.

Boyko said Ukraine is purchasing some 26 billion cubic meters (bcm) of Russian gas this year, which is 1.5 bcm less than the contract for 2012.

Vadim Chuprun, the deputy chairman of Ukraine's state gas company Naftohaz, was cited by the Russian business newspaper "Vzglyad" on November 17 as saying Ukraine would cut gas imports from Gazprom further in 2013 and would only purchase up to 20 bcm.

Russian government and Gazprom officials have insisted Ukraine pay for all the gas it agreed to purchase, whether it accepts the full volume or not.

Boyko said on television that Ukraine has a deal to buy gas from Germany at a price that is $40 to $70 cheaper per 1,000 cubic meters than Russia's price and during summer could be as much as $100 per 1,000 cubic meters lower.

Naftohaz said on November 15 the price Ukraine is paying for Russian gas in the fourth quarter of this year was some $430 per 1,000 cubic meters.

Boyko said Germany's RWE would sell Ukraine gas and it would be shipped via pipelines through Hungary starting January 1, 2013. Chuprun of Naftohaz said Ukraine would be purchasing some 5 bcm of gas "in Europe" in 2013.

Boyko also said Ukraine is offering partners in Azerbaijan's Shah Deniz project the use of Ukraine's gas pipeline network leading to Europe and use of Ukrainian underground gas storage facilities.

He said gas from Shah Deniz could be shipped through Turkey, presumably across the Black Sea, to Ukraine and from there on to Europe.

Boyko claimed the idea was supported by Turkey and Azerbaijan but did not mention whether the consortium developing the Shah Deniz field is also favorable to the plan.

BP and Norway's Statoil are the major partners in the project (each with a 25.5-percent stake), but LukAgip, a joint company of Italy's Eni and Russia's LUKoil, also own a 10-percent stake in Shah Deniz.

Ukraine's moves to decrease dependence on Russian gas and the possibility of another dispute between Kyiv and Moscow are certain to raise concerns in Europe, where people well remember the 2009 cut-off of gas supplies.

With reporting from Interfax, novostienergetiki.ru, "Vzglyad," RIA Novosti and Regnum